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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: tdl4138 who wrote (38962)	3/4/1999 7:22:00 PM
From: Platter	Read Replies (3) \| Respond to of 95453

NEW YORK, March 4 (Reuters) - Crude oil futures on the New York Mercantile Exchange (NYMEX) broke through the psychological $13-a-barrel barrier Thursday for the first time since January, lifted by heavy short covering, traders said. After peaking at $13.50 a barrel, equaling the intraday high of Jan. 12, April crude eased on profit-taking and settled at $13.35, gaining 42 cents. It was NYMEX crude's highest front-month settlement since Jan. 11, when it ended at $13.44. The contract last traded at $13.32 and posted the day's low at $12.82, also its opening price. From Tuesday, the front- month contract has moved up $1.11. April heating oil ended at 34.80 cents a gallon, jumping 1.25 cents and extending its gains in the last three sessions to 2.86 cents. The contract traded between 33.40/35.10 cents. April gasoline finished at 41.26 cents a gallon, leaping 1.35 cents and accumulating gains of 3.48 cents in three days. It bounced between 39.75/41.50 cents. April Brent crude on the International Petroleum Exchange in London last traded at $11.54 a barrel, up 29 cents, trimming gains from the day's high of $11.75, its highest front-month value since Jan. 12. "Shorts may be covering ahead of OPEC, in case the group agrees to new production cuts," said a Houston-based trader. The short covering, combined with this week's draw in U.S. crude stocks and recent refinery cuts that have tightened product supply, have convinced buyers that things are slowly improving in the oil markets, he added. A trader in New York said locals -- exchange members who trade for their own accounts -- fueled the day's buying. He said funds were in the action, too, but said their buying was light. A Washington-based trader, meanwhile, noted that recent statements from OPEC members, including Venezuela's assertion that its production will be down to agreed levels by the OPEC meeting on March 23, were supportive. And talks Tuesday between Iran and Saudi Arabia, both OPEC powerhouses, stressing the need for further production cuts have also been helpful, other traders said. "A believable agreement would almost certainly result in a further rally, perhaps even to $14.50 crude oil," said the Washington-based trader. Before getting there, however, NYMEX front-month crude's next hurdle is the $13.75 intraday high struck on Jan. 11, traders and analysts said. Last year, OPEC agreed to cut production by 2.6 million barrels per day (bpd), but some members have failed to fully comply with their output-cut pledges. That rendered the price-rescue effort ineffective and oil prices have remained depressed for months. Analysts estimate it may take another production cut of about 1.0 million bpd to rebalance the market.